Just because your credit cards have a set due date doesn’t mean you have to pay them on that date. Generally, the due date is the last day on which you can pay your card before your payment is considered late. If you choose to pay earlier, this could offset the interest calculated within a billing period.
Most credit card agreements allow you to pay your credit card before the due date. Furthermore, paying early has some benefits. First, if you have the funds available in your personal budget and choose to use it to pay your credit card early, you don’t have to worry about the risks of late payments and the impact a late payment can have to your credit score. Second, since credit cards frequently calculate interest on a per-day basis, paying early could reduce the amount of interest you pay on your balance.
Paying When Due
If your credit card company receives your payment on or before the due date, you’ll probably dodge late fees. You may also avoid paying interest if your credit card has a grace period. However, the one risk in paying your bill on the due date is that, if anything goes wrong, the payment could possibly be counted as late. Always check your statements carefully to make sure a delay didn’t unexpectedly occur when sending your payment.
The one thing you don’t want to do is to pay your credit card bill late. Credit card companies can charge late fees as a result of receiving your payment after the due date. If you allow your credit card to get very late, the penalties become even more drastic. Payments that are 30 or more days late could show up when you have your credit report checked. And be sure to check your credit card statement because some credit card companies can increase your interest rate if you’re more than 60 days late.
Payments and Scores
Keeping credit card balances low and always paying the balance due on time are some of the best things you can do for your credit. However, consistently paying your credit cards past their due date is one of many ways your credit score can drop. Another factor that you might want to keep in mind is your credit utilization rate – or the amount you owe on your credit line compared to the amount of credit available. Watching your spending habits and keeping your debt to less than one-third of your available credit is one way to keep your credit utilization rate down.